Schwann cell programming during myelination involves transcriptional networks that activate gene expression but also repress genes that are active in neural crest/embryonic differentiation of Schwann cells. We previously found that a Schwann cell-specific deletion of the EED subunit of the Polycomb Repressive Complex (PRC2) led to inappropriate activation of many such genes. Moreover, some of these genes become re-activated in the pro-regenerative response of Schwann cells to nerve injury, and we found premature activation of the nerve injury program in a Schwann cell-specific knockout of Eed. Polycomb-associated histone modifications include H3K27 trimethylation formed by PRC2 and H2AK119 monoubiquitination (H2AK119ub1), deposited by Polycomb repressive complex 1 (PRC1). We recently found dynamic regulation of H2AK119ub1 in Schwann cell genes after injury. Therefore, we hypothesized that H2AK119 deubiquitination modulates the dynamic polycomb repression of genes involved in Schwann cell maturation. To determine the role of H2AK119 deubiquitination, we generated a Schwann cell-specific knockout of the H2AK119 deubiquitinase Bap1 (BRCA1-associated protein). We found that loss of Bap1 causes tomacula formation, decreased axon diameters and eventual loss of myelinated axons. The gene expression changes are accompanied by redistribution of H2AK119ub1 and H3K27me3 modifications to extragenic sites throughout the genome. BAP1 interacts with OGT in the PR-DUB complex, and our data suggest that the PR-DUB complex plays a multifunctional role in repression of the injury program. Overall, our results indicate Bap1 is required to restrict the spread of polycomb-associated histone modifications in Schwann cells and to promote myelin homeostasis in peripheral nerve.